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NZD/USD Technical Analysis – Standing Aside Before RBNZ

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Talking Points:

  • NZD/USD Technical Strategy: Flat

  • Support: 0.8557 (trend line), 0.8513 (Oct 22 close)

  • Resistance: 0.8656 (14.6% Fib exp.), 0.8718 (23.6% Fib exp.)

The New Zealand fell as expected against its US namesake after prices put in a bearish Dark Cloud Cover candlestick pattern. The pair is now attempting to mount a rebound from rising trend line support set from mid-March, with buyers eyeing initial resistance at 0.8656 marked by the 14.6% Fibonacci expansion. A break above this barrier exposes the 23.6% level at 0.8718. Alternatively, a move below the trend line (now at 0.8557) targets the October 22 close at 0.8513.

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We will tactically opt to stay on the sidelines for now, waiting for the outcome of tomorrow’s RBNZ monetary policy announcement. Traders are pricing in a 97 percent probability of a 25bps rate hike according to data from Credit Suisse. That hints tightening alone will amount to the status quo and may not spark upside momentum absent a firm accompanying statement.

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NZD/USD Technical Analysis – Standing Aside Before RBNZ
NZD/USD Technical Analysis – Standing Aside Before RBNZ

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com


original source

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